A radical reform agenda?

Business’s view of the EU’s plan to invigorate the European economy.

European Voice

3/10/10, 11:00 PM CET

Updated 4/12/14, 7:13 PM CET

Most small businesses in Europe are at present able to look no further ahead than the end of the quarter. But they know that Europe requires a radical and cohesive long-term reform agenda – and they want policymakers to define and implement this agenda.

Europe 2020 offers hope, on paper at least (“Commission sets out blueprint for the EU’s economic recovery”, 25 February-3 March). However, as with its predecessor, the Lisbon Agenda, a large question-mark remains about delivery. Targets will prove meaningless unless national governments pursue them rigorously.

If anything, the exchanges between member states about the pros and cons of imposing sanctions and using incentives reinforce these concerns about implementation. Sanctions and incentives will not make or break Europe 2020; the real challenge is to ensure that Europe’s politicians – and electorate – accept the painful truth that reform is no longer simply an option.

From a business perspective – and Europe 2020 is, after all, essentially a business plan for the EU – the strategy must be based on the premise that what can be measured can be improved. For this reason, the inclusion in the strategy of five headline targets is important and welcome.

More broadly, there are three pre-requisites if European business is to maximise its growth and job-creating potential: firstly, an environment based on innovation, entrepreneurship, creativity and economic stability; secondly, access to the human and financial resources necessary to develop and pursue new ideas and grasp opportunities; and, thirdly, the ability to capitalise on market opportunities.

Businesses’ human-resource needs could be partially met if there were better tools to ‘match the unmatched’: there are 18 million job-seekers in Europe, yet four million posts remained vacant last year.

In the longer term, better education is needed, with ‘employability’ as a key indicator of improvement. Universities need to give more consideration to employers’ needs, and vocational education needs more respect, attention and money than it currently receives in much of Europe. We have consistently called for a ‘pact for employability’ to provide a framework for effective collaboration between businesses, public authorities, training organisations and universities.

The addition of innovation to the existing Lisbon target of investing 3% of gross domestic product into research and development is potentially significant. But extra R&D money per se will not contribute to growth, unless it responds to the needs of businesses and can be commercialised. For that to happen, there must be stronger links between business and the research community, and radical changes to the governance and philosophy of academic institutes.

A sound business plan is important to any venture, but it is worthless if it is not implemented.